Tag Archives: ACA

Consumer Choice in Health Insurance Markets Under the Affordable Care Act

If you’ve never had to shop for health insurance, consider yourself lucky. Between searching for affordable premiums, making sense of co-pays and coinsurance, and finding a plan with your favorite doctor, choosing a good health plan can be a daunting task. As a health policy student, I tried my hand last month at choosing a plan on the North Carolina exchange. Despite being well-versed in insurance concepts, I too struggled to figure out which plan would be best for me among the many options.

The Affordable Care Act (ACA) has been successful in its goals of increasing access to health insurance while preserving choice and competition in health insurance markets. It brought nearly 11 million people into the individual market who previously didn’t have insurance, and it offered them a variety of health insurance options to choose from. Despite achieving such historic milestones, however, it remains to be seen what the future might hold for the ACA. Until then, policymakers must continue working to make the process of buying insurance easier for the average American. Continue reading

Medicaid Expansion and Health Insurance Uptake, In Two Maps

The New York Times just published an article detailing changes in newly-insured people through the Affordable Care Act, otherwise known as Obamacare. 

Since passage of the ACA, people have become insured for a variety of reasons. Some gained insurance through expanded Medicaid coverage. The below map is from The Advisory Board Company and shows states that accepted and denied the ACA’s Medicaid expansion.

The two maps do not coincide perfectly, but there are some correlations. Check out Arkansas, Kentucky, and West Virginia in relation to their non-Medicaid-expanded neighbors. Wisconsin, Pennsylvania, and Maine look similar on the first map for apparently different reasons.

What patterns do you see?

HIX and Behavioral Econ

By: Zarak Khan

Obamacare will bring many changes starting January 1, 2014 to people who don’t currently get their health coverage through their job. Part of the law requires that states set up health insurance exchanges (HIX). These exchanges are a key element of expanding coverage to those currently uninsured–particularly people who will be purchasing insurance on their own since they work in a small business that doesn’t offer coverage or are self-employed.

A health insurance exchange is a governing body that sets standards for what health insurance plans are offered in a state. It is not itself an insurance company and does not offer any insurance plans, rather it ensures that the insurance market in a state is fair, transparent, competitive, and provides adequate benefits. It also provides an online marketplace where people can log on and purchase insurance.

It’s important that North Carolina’s health exchange works well – it must be an easy, efficient and informative place for people to buy coverage. This isn’t a given. Imagine, if you can, the challenge that a person who has never bought insurance before would face when making this decision. They log on to a website and are presented with dozens of plans, prices, and options. Do you think they know what a deductible is? Or a co-pay? How good do you imagine their budgeting skills are? Throw on top of that the likelihood that they have limited literacy and numeracy skills and the assumption they will make the best choice for themselves and their family becomes even more of a stretch.

The way in which information is presented to people can significantly affect their decisions–that’s no secret (particularly if you’ve ever worked in marketing). When presented with the complicated information comprising a health insurance plan, people can struggle to process all that information. At times, they can be overwhelmed by the decision and choose a sub-optimal insurance plan.

Whether North Carolina creates an exchange in partnership with the federal government or allows Washington to create the exchange, Obamacare allows significant latitude in exchange design and research from the field of behavioral economics should play a role. Challenging the traditional economic assumption that humans are perfect utility-maximizing machines, behavioral economics melds psychology and neo-classical economics to understand how people make decisions. By understanding the places where people often struggle to make choices, policymakers can develop strategies to mitigate those problems.

Creating a thoughtful choice architecture–a structure in which consumers can make an optimal decision–for the user interface of the insurance exchange can help North Carolinians buy the best and most affordable health care plan for themselves and their families.

The ACA and Responsibilities of the States

By: Sharita Thomas

 

There are many quotes about procrastination and general stubbornness that can be used to scold the states that willingly refused or were hesitant to plan for the future provisions of President Obama’s Patient Protection and Affordable Care Act (ACA). Abraham Lincoln is noted for having said that, “you cannot escape the responsibility of tomorrow by evading it today.” Currently, there is much work to be done among states’ leadership that evading the responsibility to start on an appropriate plan in accordance with the health reform law, already over two years old.

The ACA, affectionately known as “Obamacare,” was signed into law in early 2010 with major provisions scheduled to take effect by January 2014.  The overall goals of the ACA are to address what most agree to be fundamental problems with the U.S. health care system: large numbers of uninsured, rising health care costs, underinsurance, questionable quality, and fragmentation.  One rapidly approaching provision is the expansion of state Medicaid programs to 133% of the federal poverty level to increase the number of insured individuals. Medicaid is the largest public health insurance program in the U.S., being financed by state and federal funds but administered at the state level to cover the low-income population. Historically, Medicaid is as an area of contention among legislators attempting to balance state budgets.

The ACA is by no means a flawless measure and faced large pushback, including legal suits. In June of this year, the Supreme Court ruled on several arguments birthed by the ACA. One of these rulings revised a key tenant of the ACA, making it optional for states to expand their Medicaid programs. Hesitant states- West Virginia, New York, and North Carolina- have been slow to plan, trying to weigh the best option for their populations, while republican-led states- Florida, South Carolina, Texas, Mississippi, Louisiana, and Georgia- adamantly resisted expansion efforts. Much of the reluctance was speculatively linked to the uncertainty of the outcome of the 2012 presidential election. Were republican presidential candidate Mitt Romney to have come out as the victor last Tuesday evening, there is little doubt that the ACA would be left dysfunctional by pernicious funding measures.

Now that the smoke has cleared and President Barack Obama has secured re-election and extended the life of his landmark health reform law, states that were hopeful of a different outcome and those that were uncertain can no longer delay action. There is little justification, political or otherwise, that can be postured toward constituents. However, significant time has passed making any substantial progress on a functional plan doubtful for some of these states by the time the insurance exchanges begin operation in 2014. The insurance exchanges, another key provision of the ACA, allow for low and middle income people to purchase private health insurance through federal subsidies (reaching below 400% of the FPL). But states that choose not to expand their Medicaid programs to meet the level of subsidy requirement in the exchanges have the potential to leave people that fall out in an income range between Medicaid and subsidy eligibility without an affordable means to access health insurance.

Having procrastinated work on a plan and not publicizing potential pathways for incorporating provisions of the ACA may leave residents of certain states to demand of state officials how they intend to manage. States that have remained active in working towards being prepared for the 2014 provisions, like California, are able to assure progression on their plans to their population. Since November 2010, California has been developing health reform plans to expand coverage to more than half of its 7 million uninsured. The presidential election results and passage of the state’s Proposition 30 allow California to continue its progressive momentum toward stabilizing health care costs. North Carolina, largely undecided in the issue and facing a new republican governor in January, can do little presently to answer questions concerning the fate of its some 1.5 million uninsured. Newly elected North Carolina governor Pat McCory will inherit the responsibility of leading the state’s lawmakers in a direction on health reform without the guidance of previous plan or outline from the General Assembly or Governor Purdue. Florida, vocal in its stance on refusal to expand Medicaid, now has to answer a call to voters who welcome “universal coverage” after rejecting Amendment 1 on November 6th.

The ACA is a complicated and imperfect measure. Medicaid expansion is not easy for any state Medicaid director to deal with as budgets are always tight and current program issues-like increasing enrollments as a result of the recession,  demand attention. Additionally, the continuation of the ACA means that states will need to eventually increase Medicaid expenditures. The ACA is quite demanding of states and their responsibility to their population. But state leadership that continues to drag their feet on the issue due to the difficulties associated with implementation or their disagreement on the principles of the law are only setting their working class population up for even harder times. For the demands of the ACA on states, it was quite clear that strategies needed to be developed sooner rather than later for states to have clarity on the best needs of their population. Hopefully, the states that are far behind will be able to catch up, avoiding penalties on their population as a result of leadership’s procrastination.